- 14 - Section 1.165-9(a), Income Tax Regs., provides that a loss sustained on the sale of a residence used by a taxpayer as his or her personal residence up to the time of sale is not deductible under section 165(a). Harris v. Commissioner, T.C. Memo. 1982- 410, affd. on other issues 745 F.2d 378 (6th Cir. 1984). In light of the evidence indicating petitioners' personal use of this residence, we sustain respondent's disallowance of this claimed loss. The fact that petitioners may have worked in the vicinity of this residence at the offices of LCOR does not convert petitioners' personal use of this residence into business use. Further, petitioners' alleged rental of this residence to their son in 1984 does not qualify the 1986 sale of the residence as a sale of business property. We sustain respondent's adjustment on this issue. Gain on Transactions Relating to Christa Oil Co. Stock On November 26, 1985, Eva sold back to Christa Oil Co. (Christa Oil), a closely held family company, 333 shares of Christa Oil stock. In exchange, Eva received from Christa Oil $100,000 in cash and a partial interest in three oil leases. Petitioners state that Eva's tax basis in the 333 shares of stock sold to Christa Oil was $333. On petitioners' 1985 joint Federal income tax return, petitioners reported a capital gain of $647,973 relating to the sale of this stock.Page: Previous 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 Next
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